1Amending the act of November 26, 2008 (P.L.1672, No.135),
2entitled "An act providing for court-appointed conservators
3to bring residential, commercial and industrial buildings
4into municipal code compliance when owners fail to comply,"
5further providing for definitions, for initiation of action,
6for appointment of conservator, for powers and duties of
7conservator, for incurring indebtedness and for sale of
8property.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. The definitions of "building," "costs of
12rehabilitation," "nonprofit corporation," and "party in
13interest" in section 3 of the act of November 26, 2008 (P.L.
141672, No. 135), known as the Abandoned and Blighted Property
15Conservatorship Act, are amended and the section is amended by
16adding definitions to read:

17Section 3. Definitions.

18The following words and phrases when used in this act shall

1have the meanings given to them in this section unless the
2context clearly indicates otherwise:

3"Abandoned property." Any property that meets the
4requirements of conditions of conservatorship as provided in
5section 5(d).

6* * *

7"Building." A residential, commercial or industrial building
8or structure and the land appurtenant thereto, including a 
9vacant lot on which a building has been demolished.

10* * *

<-11"Conservator's or developer's fee." A fee equal to the
12greatest of the following:

13(1) an amount equal to $2,500, adjusted upward by 2%
14each year;

15(2) a 20% markup of the costs and expenses for
16construction, stabilization, rehabilitation, maintenance and
17operation or demolition as described in the proposed
18conservator's plan and any subsequent plan approved by the
19court; or

20(3) twenty percent of the sale price of the property.

21"Costs of rehabilitation." Costs and expenses for
22construction, stabilization, rehabilitation, maintenance and
23operation or demolition, including reasonable nonconstruction
24costs associated with the project, including, but not limited
25to, environmental remediation, architectural, engineering and
26legal fees and costs, permits, financing fees and a 
<-27conservator's or developer's fee [consistent with the standards
28for developers' fees established by the Pennsylvania Housing
29Finance Agency].

30* * *

<-1"Developer's fee." A fee equal to the greatest of the
2following:

3(1) an amount equal to $2,500, adjusted upward by 2%
4each year;

5(2) a 20% markup of the costs and expenses for
6construction, stabilization, rehabilitation, maintenance and
7operation or demolition as described in the proposed
8conservator's plan and any subsequent plan approved by the
9court; or

10(3) twenty percent of the sale price of the property.

11* * *

12"Nonprofit corporation." A nonprofit corporation that has,
13as one of its purposes remediation of blight, community
14development activities, including economic development, historic
15preservation or the promotion or enhancement of affordable
16housing opportunities.

17* * *

18"Party in interest." A person or entity who has a direct and
19immediate interest in a residential, commercial or industrial
20building, including:

21(1) The owner.

22(2) A lienholder and other secured creditor of the
23owner.

24(3) A resident or business owner within [500] 2,000 feet
25of the building.

26(4) A nonprofit corporation, including a redevelopment
27authority, which:

28(i) except as set forth in subparagraph (ii), is
29located in the municipality where the building is
30located; and

1(ii) for a building located in a city of the first
2class, is located in the city and has participated in a
3project within a [one-mile] five-mile radius of the
4location of the building.

5(5) A municipality or school district in which the
6building is located.

7* * *

8Section 2. Section 4 4(b) and (d)(1) of the act <-are amended 
9and the section is amended by adding a subsection to read:

10Section 4. Initiation of action.

11* * *

<-12(b) Contents.--The petition submitted to the court shall
13include a sworn statement that, to the best of the petitioner's
14knowledge, the property meets the conditions for conservatorship
15set forth in section 5(d) and to the extent available to the
16petitioner after reasonable efforts to obtain such information:

17(1) A copy of any citation charging the owner with being
18in violation of municipal code requirements or declaring the
19building to be a public nuisance.

20(2) A recommendation as to which person or entity should
21be appointed conservator.

22(3) A preliminary plan with initial cost estimates for
23rehabilitation of the building to bring it into compliance
24with all municipal codes and duly adopted plans for the area
25in which the building is located and anticipated funding
26sources.

27(4) A schedule of mortgages, liens and other
28encumbrances on the property.

29* * *

30(d) Notification of owner, political subdivisions and

1lienholders.--

2(1) Upon filing the petition with the court, the
3petitioner shall notify the current owner of the property,
4all political subdivisions in which the property is located, 
5all municipal authorities known to have provided service to 
6the property and all lienholders of the filing by registered
7or certified mail to the last known address of each and by
8posting a copy of the notice on the building.

9* * *

10(e) Adjacent properties.--The petition may include one or
11more adjacent properties in a single action if:

12(1) the property that is the primary subject of the
13action is owned by the same owner as the adjacent property;
14and

15(2) the properties are or were used for a single or
16interrelated function.

17Section 3. Section 5(a), <-(c), (d), (e), (f) and (g) of the
18act are amended to read:

19Section 5. Appointment of conservator.

20(a) General rule.--The court shall act upon a petition
21submitted by holding a hearing within [120] 60 days of receipt
22of the petition and by rendering a decision no later than 30
23days after completion of the hearing.

24* * *

<-25(c) Hearing.--At the hearing, any party in interest shall be
26permitted to present evidence to support or contest the
27petition, including, but not limited to, the schedule of 
28encumbrances.

29(d) Conditions for conservatorship.--If a petition is filed
30under section 4, the court may appoint a conservator if all of

1the following apply as of the date of filing:

2(1) The building has not been legally occupied for at
3least the previous 12 months.

4(2) [The building has not been actively marketed during
5the 60 days prior to the date of the petition.] The owner 
6fails to present compelling evidence that he has <-actively 
7marketed the property during the preceding 60-day period and 
8made a good faith effort<-, during the preceding 60-day period, 
9to sell the property at a price which reflects the 
10circumstances and market conditions.

11(3) The [building] property is not subject to [an
12existing] a pending foreclosure action[.] by an individual or 
13nongovernmental entity.

14(4) The current owner fails to present sufficient
15evidence that he has acquired the property within the
16preceding six months. The evidence shall not include
17instances where the prior owner is a member of the immediate
18family of the current owner, unless the transfer of title
19results from the death of the prior owner, or where the
20current or prior owner is a corporation, partnership or other
21entity in which either owner or the immediate family of
22either owner has an interest in excess of 5%.

23(5) The court finds at least three of the following:

24(i) The building or physical structure is a public
25nuisance.

26(ii) The building is in need of substantial
27rehabilitation and no rehabilitation has taken place
28during the previous 12 months.

29(iii) The building is unfit for human habitation,
30occupancy or use.

1(iv) The condition and vacancy of the building
2materially increase the risk of fire to the building and
3to adjacent properties.

4(v) The building is subject to unauthorized entry
5leading to potential health and safety hazards and one of
6the following applies:

7(A) The owner has failed to take reasonable and
8necessary measures to secure the building.

9(B) The municipality has secured the building in
10order to prevent such hazards after the owner has
11failed to do so.

12(vi) The property is an attractive nuisance to
13children, including, but not limited to, the presence of
14abandoned wells, shafts, basements, excavations and
15unsafe structures.

16(vii) The presence of vermin or the accumulation of
17debris, uncut vegetation or physical deterioration of the
18structure or grounds has created potential health and
19safety hazards and the owner has failed to take
20reasonable and necessary measures to remove the hazards.

21(viii) The dilapidated appearance or other condition
22of the building negatively affects the economic well-
23being of residents and businesses in close proximity to
24the building, including decreases in property value and
25loss of business, and the owner has failed to take
26reasonable and necessary measures to remedy appearance or
27the condition.

28(ix) The property is an attractive nuisance for
29illicit purposes, including prostitution, drug use and
30vagrancy.

1(e) Appointment.--

2(1) If the court determines after a hearing that the
3property has met the conditions of subsection (d), the court
4may appoint a conservator<-, certify the schedule of 
5encumbrances and grant such other relief as may be just and
6appropriate. <-The certification shall be binding with respect 
7to all mortgages, liens and encumbrances, including municipal 
8liens, arising or attaching to the property prior to the date 
9of the petition.

10(2) The court shall give first consideration for
11appointment as conservator to the most senior nongovernmental
12lienholder on the property.

13(3) In the event the senior lienholder is found to be
14not competent or declines the appointment, the court may
15appoint a nonprofit corporation or other competent entity. If
16the property is located in a city of the first class, the
17nonprofit corporation or entity must be located in the city
18and must have participated in a project within a [one-mile] 
19five-mile radius of the location of the property. In
20appointing a conservator, the court shall:

21(i) consider any recommendations contained in the
22petition or otherwise presented by a party in interest;
23and

24(ii) give preference to the appointment of a
25nonprofit corporation or governmental unit over an
26individual.

27(f) Conditional relief.--

28(1) If the court finds after a hearing that the
29conditions for conservatorship set forth in subsection (d)
30have been established, but the owner represents that the

1conditions, violations or nuisance or emergency condition
2will be abated in a reasonable period, the court may allow
3the owner to proceed to remedy the conditions.

4(2) If the conditions set forth in paragraph (1) have
5been satisfied, the court shall enter an order providing
6that, in the event that the violations or nuisance or
7emergency conditions are not abated by the owner by a
8specific date or that other specified remedial activities
9have not occurred by a specific date or dates, an order
10granting the relief requested in the petition shall be
11entered.

12(3) The court [may] shall also require the owner to post
13a bond in the amount of the repair costs estimated in the
14petition as a condition to retaining possession of the
15building.

16(4) <-A contract for sale entered into subsequent to the
17filing of a petition for conservatorship shall be subject to
18court approval and to reimbursement of costs incurred by the
19petitioner in preparing and filing the petition in accordance
20with the requirements of section 4. <-Upon a finding that:

21(1) the petition states conditions for conservatorship;
22or

23(2) the owner elects to either:

24(i) remedy all violations and nuisance or emergency
25conditions; or

26(ii) sell the property subject to the
27conservatorship,

28the owner shall reimburse the petitioner for all costs
29incurred by the petitioner in preparing and filing the
30petition in accordance with the requirements of section 4 <-and

1the conservator's or developer's fee.

2(g) Conservator's lien.--The conservator may file a lien
3against the property in an amount based on the costs incurred
4during the conservatorship, including, but not limited to, costs 
5of rehabilitation, attorney fees and court costs. The lien 
6amount may be adjusted from time to time.

7* * *

8Section 4. Section 6(a)(4) and (14) and (c)(1) and (5) of
9the act are amended to read:

10Section 6. Powers and duties of conservator.

11(a) Full powers and duties.--The conservator shall have all
12powers and duties necessary or desirable, from time to time, for
13the efficient operation, management and improvement of the
14building in order to bring it into compliance with all municipal
15building and housing code requirements and to fulfill the
16conservator's responsibilities under this act. Such powers and
17duties shall include, but not be limited to, the power to:

18* * *

19(4) Contract for the repair and maintenance of the
20building. The contracts shall be appropriately documented and
21included in the reports and accounting which the conservator
22is required to submit or file under the provisions of this
23act. The conservator shall make a reasonable effort to
24solicit three bids for contracts valued at more than $25,000, 
25except when the contractor or developer provides or obtains 
26financing for the conservatorship.

27* * *

28(14) Exercise all authority that an owner of the
29building would have to improve, maintain and otherwise manage
30the building, including the extent to which rehabilitation
 

1will satisfy the goals of the conservatorship.

2(c) Hearing on conservator's final plan for abatement.--

3(1) At the time the court appoints a conservator, the 
4conservator may present and the court may approve the final 
5plan for abatement. If no plan is presented at that hearing,
6a hearing date on the conservator's final plan for abatement
7shall be set within 120 days of the appointment.

8* * *

9(5) At the time of the hearing, all parties shall be 
10allowed to comment on the plan, and the court shall take all 
11comments into consideration when assessing the feasibility of 
12the plan and the proposed financing. In making its 
13assessment, the court shall give reasonable regard to the 
14conservator's determination of the scope and necessity of 
15work to be done for the rehabilitation or demolition of the 
16building in approving the final plan and in approving the 
17costs of conservatorship and sale of the property.

18* * *

19Section 5. Sections 8(b) <-and (c) and 9(b)(2) and (d) of the
20act are amended to read:

21Section 8. Incurring indebtedness.

22* * *

23(b) Liens.--In order to facilitate the borrowing of funds
24for the costs of rehabilitation, the court may grant priority 
25status to a lien [or security interest with priority over all
26other liens with the exception of municipal or other
27governmental liens, provided, however, that prior to granting a
28priority lien, the court has found that] given to secure payment 
29on a debt incurred for purposes authorized under this chapter 
30provided that:

1(1) [The] the conservator sought to obtain the necessary
2financing from the senior, nongovernmental lienholder, but
3the lienholder declined to provide financing for reasonable
4improvements or other costs of rehabilitation on reasonable
5terms[.]; and

6(2) [Lien] lien priority is necessary in order to induce
7another lender to provide financing on reasonable terms.

<-8[(c) Lien status of rehabilitation expenses.--Should the
9senior lienholder agree to provide financing for the costs of
10rehabilitation, any funds lent to cover the costs shall be
11deemed to be added to the senior lienholder's preexisting first
12lien.]

13* * *

14Section 9. Sale of property.

15* * *

16(b) Sale by conservator.--Upon application of the
17conservator, the court may order the sale of the property if the
18court finds that:

19* * *

20(2) The conservator has been in control of the building
21for more than [six] three months and the owner has not
22successfully petitioned to terminate the conservatorship
23under section 10.

24* * *

25(d) Distribution.--The proceeds of the sale shall be applied
26in accordance with the following priorities to:

27(1) All court costs.

28(2) [Municipal or other governmental liens.] Liens of 
29the Commonwealth, liens for unpaid property taxes and 
30properly recorded municipal liens.

1(3) Costs and expenses of sale.

2(4) Principal and interest on any borrowing or
3incurrence of indebtedness granted priority over existing
4liens and security interest under section 8(b).

5(4.1) Costs incurred by the petitioner in preparing and
6filing the petition in accordance with the requirements of
7section 4.

8(5) Costs of rehabilitation and any fees and expenses
9incurred by the conservator in connection with the sale or
10the safeguarding of the property for which the lien
11authorized under section (5)(g) was filed.

12(6) Valid liens and security interests in accordance
13with their priority.

14(7) Any unpaid obligations of the conservator.

15[(8) Costs incurred by the petitioner in requesting the
16court to place the property in conservatorship.]

17(9) The owner.

18* * *

19Section 6. This act shall take effect in 60 days.